A Human Face for Swiss Banks; Unlikely Mediator for Dispute Over Jewish Assets

Hans J. Baer seems tailor-made for representing Swiss banks in their bitter struggle with Jewish organizations over the recovery of assets belonging to Holocaust victims.

For decades, the 70-year-old Mr. Baer (pronounced bare) ran the Julius Baer Group, one of the biggest private banking groups in Zurich, Switzerland's financial capital, and he remains its chairman emeritus. That gives him influence with Swiss bankers.

As a teen-ager, he lived in Riverdale, the Bronx, for several years, with the result that he speaks fluent English with a slight American accent and understands American culture and the American character. That gives him a big advantage in dealing with American Jews and their sympathizers in Congress and the courts, who are among the Swiss banking industry's severest critics,

Finally, Mr. Baer is that anomaly, a Jewish Swiss banker, the elder statesman of the only important Zurich bank founded by a Jewish family. And that gives him credibility with the Jewish groups demanding restitution from Switzerland for money that has long disappeared into the black hole of Swiss banking secrecy.

Today, two and a half years into the negotiations for a resolution to the dispute, he has clearly won the trust of both sides. ''He realized early on, earlier than any other Swiss banker, that a big error was being made'' by stonewalling, said Israel Singer, secretary general of the World Jewish Congress.

That does not mean that Mr. Baer is a pushover. Ivan Pictet, a partner at Pictet & Company in Geneva, one of Switzerland's most successful private banks, describes him as ''one of the best defenders of the Swiss financial center in the last 12 months, in the nightmare we went through.'' He added: ''We owe him quite a lot.''

His secret seems to be not so much negotiating brilliance as putting a human face on Swiss banking. At first, the financial establishment here treated demands by Jewish groups for a full accounting of what happened to the assets of Jews killed by the Nazis as a public relations nuisance.

Mr. Baer himself was slow to see the Jewish groups' point of view. Bank Julius Baer had done a search of its records in 1962 for accounts of Holocaust victims, as required by a new Swiss law. That, he figured, was enough.

He, and his banking colleagues, soon realized it was not, as American cities and states threatened boycotts and Holocaust survivors brought a class-action lawsuit before an American court in October 1996.

But while the growing clamor did attract his attention, Mr. Baer says, what really changed his mind was the callous way Swiss banks -- including his own -- dealt with inquiries from Holocaust victims' families. He remembers reading a Wall Street Journal article in 1995 about an Israeli woman who had asked Bank Julius Baer about an account she believed her father had opened in 1938 before being sent to the Dachau concentration camp. According to the article, the bank charged a fee of $86 to look into the matter, found nothing and icily informed the woman that ''the search can go no further.''

Mr. Baer did his own investigating and discovered that the woman's father had actually survived Dachau and had opened the account in the 1950's. Yet when he saw the legalistic language of the letter that his bank had written to the family, he was shocked. A fellow Swiss banker once told him, he said, that ''if the Swiss banks had been kinder, much of this would not have happened,'' and he agrees.

At the very least, he said, letters to families who inquired about a deceased relative's account should have begun by saying that the bank was terribly sorry to learn of the death. ''The words 'sorry' and 'terribly' are missing,'' Mr. Baer said.

Mr. Baer's involvement in the negotiations began in September 1995, when officials of the World Jewish Congress met the board of the Swiss Bankers Association, including Mr. Baer. He moved gradually into a leadership role, he says, serving ''as a connecting bridge'' between the two groups. He adds half-jokingly that he is not the only Jewish voice on the Swiss bankers' side; many lawyers and public relations people in the United States are, too. ''The whole camp is Jewish,'' he said with a laugh.

In the early stages of the talks, Mr. Baer found himself caught in a crossfire. In discussions with Swiss bankers, he found himself subjected to what he described as ''intemperate outbursts.'' Jewish representatives attacked him as an obstinate defender of Swiss banking interests, who believed the issue of Holocaust accounts had long been settled and who resented Jewish groups' efforts to reopen it.

The crux of the dispute, Mr. Baer says, was and is documentation. He uses his own bank as an example. Before World War II, he says, identification was rarely required of account openers, and not until the 1960's did Bank Julius Baer regularly require that prospective depositors present a passport. Even when papers were filed, many have been lost or forgotten.

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Jewish officials point additionally to a 10-year statute of limitations in Switzerland for accounts that show no deposits or withdrawals, after which the banks may destroy the account records, blurring any trail of assets.

Mr. Baer championed the banks' legitimate interests, while gradually opening to the concerns of Jewish representatives. In the end, he was able to find a way to bridge the distrust that separated the two sides: the appointment of an international commission of historians to study Swiss financial dealings with Nazi Germany and the establishment of an independent audit of Swiss banks' books headed by Paul A. Volcker, the former Federal Reserve chairman.

A May 1996 memorandum laying out the terms of the agreement was drafted jointly by Mr. Baer and Mr. Singer of the World Jewish Congress. Bank Julius Baer was one of five banks chosen by Mr. Volcker's group for a test audit. The others were the cantonal banks of Geneva and St. Gall; Bank Baumann and the Union Bank of Switzerland. Test audits were run on five other banks: Credit Suisse, the Swiss Bank Corporation, Pictet & Company, the Cantonal Bank of Waadt and the Bern Savings and Loan Bank.

As the talks have continued, the attitude of Swiss bankers has evolved from a circle-the-wagons mentality to one much more sensitive to world opinion. That change was evident in the Union Bank of Switzerland's treatment of a night watchman who saved Holocaust-era documents from being shredded in the bank's basement early in 1997 and then passed the papers to a Jewish organization.

The watchman, Christoph Meili, was dismissed by the security company that employed him and he later fled to the United States, saying he felt unsafe in Switzerland. But when Union Bank announced its mergerwith the Swiss Bank Corporation, its new chairman, Mathis Cabiallavetta, publicly apologized to Mr. Meili.

Meanwhile, American state and local finance officials have urged a temporary easing of sanctions on Swiss banks to clear the way for a possible negotiated settlement of the $20 billion class-action lawsuit brought by Holocaust survivors and their heirs. Because of the difficulty of finding documentation, Jewish officials like Mr. Singer believe such an agreement is the only way to resolve the dispute. Already, the banks have agreed to a Holocaust fund, into which $195 million has been placed to make payments to Holocaust survivors.

Mr. Baer keeps busy in other activities besides banking. To mark his 70th birthday in December, he traveled to Minsk, in Belarus, to donate $35,000 to serve warm meals to elderly Jews there.

A large, gregarious man, he also shares the artistic interests of his mother, Ellen Weyl, an accomplished sculptor. Known as a patron of the arts, he has sat on the board of the Zurich Tonhalle, the philharmonic society, since the early 1980's.

Mr. Baer realizes he escaped the Nazi terror because his family was wealthy and successful enough to get to the United States. In 1940, after France's surrender to Germany left Switzerland surrounded by the Axis powers, Mr. Baer's father, Richard Baer, decided to take his family to safety in America.

The elder Mr. Baer had forsaken banking to become a successful experimental physicist, and had been offered a position at Princeton University. Though he died 11 days before the departure date, his wife, Ellen, and four children, including Hans Baer, went anyway and spent the war years in Riverdale.

The family bank, which had been founded in 1890 by Hans Baer's grandfather, Julius Baer, a businessman who migrated to Switzerland in the last century from southern Germany, was buffeted by the war years. Though other Swiss banks profited from the war, by 1944 Bank Julius Baer's assets had tumbled below their 1920 level. A meager profit was eked out through securities trading, but to cover operating costs, the bank had to mortgage its building.

Though Hans Baer earned a degree in engineering at Lehigh University, by 1947, when a principal bank manager who was not a family member retired, he chose to return to Zurich and enter the family business. Hans Baer retired as the group's chairman in 1996 and was succeeded by Thomas Baer, his brother, who is 60.

Today, Bank Julius Baer is prospering. While some Swiss banks involved in the disputes over Jewish assets are big commercial banks that also provide private banking services, Bank Julius Baer is a private bank that mainly manages rich people's money, though institutions' share of its asset-management business has grown to about 30 percent over the last decade. In all, assets under its management grew by nearly 30 percent in 1996, to 63.6 billion Swiss francs ($44.4 billion), and Rudolf E. Baer, the group's chief executive and Hans Baer's cousin, said the group expected to register similar growth for 1997.

Gunter Woernle, senior vice president at Banque Baring Brothers (Suisse) S.A. in Geneva, and an expert on private banking, said Hans Baer was one reason for the bank's success. ''He possessed an ability to bring in good people, and to go very aggressively into new businesses,'' he said. The Julius Baer Group, he added, ''is one of the best- managed banks in Switzerland.''

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A version of this biography; chronology appears in print on January 1, 1998, on Page D00001 of the National edition with the headline: A Human Face for Swiss Banks; Unlikely Mediator for Dispute Over Jewish Assets. Order Reprints|Today's Paper|Subscribe